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Holiday 2008: The Winners

Yes, there were actually a few multichannel merchants that did well this holiday season, despite the dismal economy. We caught up with a few of them to see how they did it.

Urban Outfitters was perhaps the big winner: As reported earlier, the apparel and home decor merchant’s total revenue increased 9% to $389 million, for the two-month period ended Dec. 31.

Chief financial officer John Kyees says the increase was “comparable with our plan.”

The company’s direct sales, which include its Anthropologie, Free People, and Urban Outfitters catalogs, were up a whopping 25% for the same period. “We’re especially pleased with the 25% increase for direct sales,” Kyees says, adding that the company was surprised to see this large of a shift to the Web this holiday season.

So why are direct sales up so much? “I really don’t know— probably because our merchandising is good,” he says.

Too many retailers out there “are just playing is safe” in terms of sourcing product, Kyees says. They need to take more risks.

“You can outperform your peers if you have the courage to select the product that’s going to make you stand out,” he adds. “In this economy, you have to be willing to take some chances, you have to be willing to play close to the edge.”

The company saw record sales during the first week of December, around Cyber Monday (Dec. 1) and around the TV air date of the Victoria’s Secret fashion show on Dec. 3, Hoffman says. Victoria’s Secret was strategic about its promotions, she says, “so we were able to drive demand and clear through our inventory.”

When the economy is this bad, flat is the new up. Although outdoor gear merchant Bass Pro Shops’ holiday sales were up only slightly compared with last year, the company is “thrilled to have done so well in this economy,” says spokesperson Larry Whitely. “It wasn’t a big increase—but we didn’t lose,” he says.

The cataloger/retailer did about the same degree of prospecting as in 2007, but it increased its efforts in terms of search and affiliate marketing – and particularly in-store promotions.

“For Black Friday we do this thing called ‘Santa’s Wonderland’ which was a major marketing plan we did for attracting families to our stores,” he says. “And we got a lot of new families because of it – and we also got a lot of positive press.”

The company also did a Black Friday “camp out” event where customers can come and camp out at the stores on Black Friday Eve and get a jump start on their holiday shopping early the next morning.

“People come and camp out at the store — and we have s’mores and hot chocolate and families can play games,” he says.

“We cross-promote everything,” Whiteley adds. “We have our own TV show, we have our own nationally syndicated radio show and of course our Website, our stores and our catalog—we cross-promote between all those things all the time.”

And unlike a lot of retailers in 2008, “we didn’t do a lot of price-cutting—or offer a whole lot of special deals,” Whiteley notes. “It was all about the experience. Our stores are experiential anyway—they’re destinations.”